The U.S. government is preparing to formally announce a massive $550 billion investment from Japan this week, as stated by Commerce Secretary Howard Lutnick.
U.S.-Japan Investment Deal Expected This Week
The announcement of the significant investment is expected to be made this week, Lutnick said on Monday during an appearance on Fox News’ Ingraham Angle show. The investment is part of a deal between the U.S. and Japan.
Ryosei Akazawa, Japan’s top trade envoy, is scheduled to visit Washington to finalize the investment package. The funds from Japan could be used for the production of items such as semiconductors, antibiotics, or rare earths in the U.S.
The specifics of the investment returns’ distribution between the U.S. and Japan will be formalized in a written confirmation during Akazawa’s visit this week. The agreement, which was reached in July, includes a reduced 15% tariff on imports from Japan in exchange for the investment. However, the specifics of the package remain unclear.
Akazawa, in a Tuesday briefing, did not confirm his U.S. trip and declined to comment on Lutnick’s remarks. He did, however, express Tokyo’s intent to press Washington to implement the tariff reduction deal soon.
The United States has urged Japan to formalize the investment plans through a written agreement, but Japan is inclined to keep the deal less legally binding, reported Reuters, citing Nikkei Business Daily.
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Revision Of Japan Trade Deal, Scrapping Of Overlapping Tariffs
The U.S. government has pledged to rectify a presidential executive order, which will result in the removal of overlapping tariffs on Japanese goods. The revision will prevent a 15% tariff on Japanese goods from being applied to products already subject to higher tariffs, such as beef.
President Donald Trump declared in July that a monumental trade agreement had been reached with Japan. The deal, valued at $550 billion, will see Japan investing heavily in the U.S., with America receiving 90% of the profits. However, Japanese officials insist the investments will be decided based on mutual benefits. The $2 billion investment in Intel INTC by SoftBank Group SFTBY announced last week is not currently part of the package.
The trade deal and political turmoil surrounding Prime Minister Shigeru Ishiba led to Japan’s 10-year bond yields surging to 1.59%—levels not seen since 2008.
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